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Cumin: Supply Chain Constraints and Prospects Dr. Vinod Kumar*

*Deputy General Manager, Department of Economic Analysis and Research, NABARD, Mumbai.

Trend in ProductionThe area and production of cumin seed in India is 8.08 lakh hectares and 5.03 lakh tonnes. In India, cumin is mainly grown in Gujarat and Rajasthan, accounting for 99 per cent of area and production due to favourable agro climatic conditions. The share of Gujarat in the total area and production was 36.55 per cent and 59.80 per cent, respectively, during 2015-16. In Gujarat, Surendranagar, Banaskantha, Rajkot, Jamnagar, Porbandar, Mehsana and Patan are the major cumin seed producing districts, whereas in Rajasthan, Barmer, Jalore, Nagaur, Pali and Jodhpur are the main producing districts. Production estimates for 2016-17 are lower due to a decline in the Jeera acreage in the states (Table 1). The compound annual growth rates (CAGR) of area

Issue : XXIII Sept. - Oct. 2017

and production are 5.15 and 10.95 per cent, respectively in Gujarat which is higher than Rajasthan and India. The average productivity in Gujarat is 886 kg/ha compared to that of Rajasthan at 368 kg/ha and India (616 kg/ha). The low productivity of Jeera in Rajasthan is due to frequent drought, varietal difference and lack of assured irrigation facilities while high productivity in Gujarat may be due to the availability of irrigation water from Narmada project and check dam. The average productivity obtained in frontline demonstration and yield potential of GC-4 variety is 1250 kg/ha and 1875 kg/ha, respectively, which is much higher as compared to 886 kg/ha. It indicates that there is a wide productivity gap between actual and potential/realisable yield. There is a need to bridge productivity gaps.

India is the homeland of spices since ancient times. It is the largest producer, consumer and exporter of spices, with 48 per cent share by volume and 43 per cent share by value, in the world. Gujarat is the second leading producer of spices after Andhra Pradesh in the country. Cumin (Jeera) is one of the major spices in the country with a share of 23.38 per cent in total area and 11.11 per cent in total production. It has pharmaceutical, nutraceutical, perfumery and cosmetic uses. India contributes about 70 per cent of world cumin production followed by Syria 12 per cent, Iran 8 per cent, Turkey 6 per cent and other countries 4 per cent. India accounts for 73 per cent of the Global trade. Vietnam, USA, UAE, UK, Malaysia, Brazil, Egypt, Bangladesh, Saudi Arabia, Nepal, Sri Lanka are the major markets for India’s cumin exports. This paper covers the production trends and marketing issues, recommends bridging yield gap, improving market infrastructure and establishing Spice Park for sustainable growth in cumin economy.

Table 1: Trends in Area and Production of Cumin in India(Area in ‘00 ha. and Production in ‘00 MT)

Year Gujarat Rajasthan IndiaArea Production Area Production Area Production

2000-01 1159.4 625.9 1998.4 767.6 3157.8 1393.62001-02 1451.0 613.0 3815.3 1451.1 5266.3 2064.12002-03 2000.5 642.7 3212.0 704.8 5212.5 1347.52003-04 2030.1 820.0 2278.3 1209.8 4308.4 2029.82004-05 2081.4 1069.8 1595.4 690.9 3676.8 1760.72005-06 2692.2 1476.1 1351.1 522.4 4030.3 1998.52006-07 2592.2 1528.5 1498.2 236.6 4090.3 1765.12007-08 2624.6 1985.0 2154.8 663.6 4779.4 2648.62008-09 3565.0 2388.0 1691.4 427.3 5271.3 2830.02009-10 3117.6 2219.1 2038.5 805.3 5171.3 3039.42010-11 2928.5 2192.2 3306.3 1149.3 6250.9 4730.42011-12 3739.0 2833.0 4679.8 1778.4 8434.0 4626.52012-13 3739.0 2833.0 2200.0 1110.0 5939.8 3943.32013-14 3700.0 2800.0 3200.1 1650.3 6900.8 4450.32014-15 (P) 2667.0 2514.3 4347.8 1208.3 7015.6 3722.92015-16 (P) 2954.0 3009.4 5110.8 2008.5 8082.3 5032.62016-17 (Est) 2790.0 2250.0 4810.0 2602.0 7601.0 4854.8CAGR (%) 5.15 10.95 4.80 6.52 4.82 8.72Source: Spices Board of India, Socio-economic Review, GoG, Economic Review, GoR, MoA&FW, GoI

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Cost of CultivationThe cost of cultivation of cumin in Gujarat during 2015-16 worked out to be `56749 per ha. The gross income and net income were `96427 and `39678 per ha, respectively. The per rupee returns from cumin seed cultivation worked out to be `1.70 indicating good return to the farmers. The cumin seed producers are confronted with problems such as non-availability of high yielding disease resistant varieties in time, lack of proper agronomic practices, inadequate extension services, inadequate credit support from institutional sources, lack of adoption of harvesting and post harvesting technology and lack of centralized facilities for cleaning, grading, processing, packing and scientific storage infrastructure.

Supply of quality inputs, following scientific cultivation practices, improved market facilities in APMCs, strengthening of extension services, suitable price policy, encouragement of contract farming, promotion of organic farming to exploit the trade opportunities and encourage eco-friendly approach for cumin seed production, i.e. integrated nutrient and pest and disease management practices to avoid indiscriminate use of chemical fertilizers and pesticides will go a long way in improving the quality of cumin seeds.

Price TrendsThe domestic price of cumin seeds mainly depends on the forecast of area, production, weather during crop development stages, carryover stocks and export demands, etc. Bumper crop is expected during 2017-18 due to good sowing progress.

The major trading centres for cumin seeds are Unjha, Patan, Mehsana, Visnagar in Gujarat and Jaipur, Kishangarh, Kekri, and Jodhpur in Rajasthan. The major spot markets are Delhi, Unjha, Rajkot in Gujarat; Nagaur, Jodhpur, Pali, Kekri and Jaipur in Rajasthan. Jeera is traded in commodity exchange. Jeera prices generally remained pressurised in the beginning of the year from February onwards amid arrival of fresh crop in the market and as stockist sell off their produce ahead of the onset of the jeera harvesting season in the country. Price tends to move upward from June, as the crop arrival season concludes in India. Stockist buying and lack of supply from other countries also support this uptrend in prices which continues till August –September when prices start retreating once again with fresh jeera supply coming from Syria and Turkey. Prices

trade at lower level till October and again begin to firm up with receding arrivals from all countries (Table 2).

Week-wise spot price of jeera in Unjha APMC during 2017 is given in Chart 1. The minimum spot prices of jeera vary from ̀ 10000/qtl in February end to ̀ 16750/qtl in the month of July. The maximum prices vary from ` 18200/qtl in July to ` 21500/qtl in October. The modal prices of jeera spot prices vary from `16000/qtl in October to `18200/qtl in the month of November 2017. The data revealed that the gap between minimum and maximum prices narrowed towards end of the year.

Table 2: Average Monthly Price of Jeera in India( `/Qtl)

Year Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Avg.2012-13 12750 14325 14150 15625 16625 15200 15563 15925 15910 15588 14875 14250 150662013-14 14375 14750 14630 14675 14830 14875 14200 13610 13750 13390 12700 11025 139012014-15 10938 12150 12375 12340 11775 11725 11630 12383 13425 14350 15400 15050 127952015-16 16563 17350 17250 16650 16937 16750 17050 17000 17063 16000 15750 16080 167042016-17 16875 17937 17870 19975 20400 19470 18787 18875 19800 19750 19825 19350 190762017-18 20387 20000 19400 19875 20240 19800 19625 19925 - - - - 19907Source: Spices Board of India

Source: Spices Board of India

Jeera prices for March’ 18 delivery on NCDEX is currently trading at ` 17475 per quintal, almost lower by `2060 than the January’ 18 delivery contract. Further, price movement will depend on the expected demand and quality of Jeera produced in the season. Any weather related disturbance might provide support to the prices before the harvesting starts in March.

Unjha APMC in Mehsana District of Gujarat is the largest Jeera Trading Market in the Asia. Unjha APMC has refused to join the on-line platform for now, citing lack of capabilities to maintain the flow of commodity arrivals to put them on-line. During the season, on an average over one lakh bags (55 Kg/bag) of Jeera arrive daily. Sampling, lab testing and grading of such a quantity was not feasible for the Unjha APMC which is globally renowned as a Jeera Trading Hub. Since it handles large arrivals, need some extra infrastructure support for NAM. Another reason for Unjha APMC’s decision to not join e-NAM is fear among the traders that they would end up losing their commission.

Marketing System of CuminThe marketing system (Kumar,Vinod, 2013, IJAM) in respect of sale of cumin i.e. place-wise, time-wise, lot-wise and agency-wise is presented below:

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(i) Place-wise Sale Pattern of Cumin Seed: Selected farmers marketed 95.41 per cent cumin seed surplus in the regulated market and only 4.59 per cent quantity was marketed to village traders.

(ii) Time-wise Sale Pattern of Cumin Seed: Selected farmers sold 84.13 per cent cumin seed surplus in the first two quarters of the year i.e. March to August and only 15.87 per cent quantity of cumin seed was sold by them in other two quarters of the year i.e. September to February months.

(iii) Lot-wise Sale Pattern of Cumin Seed: Sixty-six per cent farmers marketed 62.03 per cent surplus cumin seed in one lot, 21 per cent farmers sold 25.63 per cent cumin seed surplus in two lots, 5 per cent farmers sold 2.46 per cent in three lots and 8 per cent farmers disposed off 9.88 per cent surplus cumin seed in more than three lots. It is well known that cumin seed deteriorates in quality like other seed spices during storage. Hence, the tendency of sale of cumin seed in one lot was more common (62.03 per cent surplus). It was also observed that small and marginal farmers sold entire surplus in one lot.

(iv) Marketing Channel and Efficiency: Two marketing channels were observed in sale of cumin and they are (I) Farmers/Producers --> Village Traders --> Wholesalers --> Retailers --> Consumers (Village sale) and (II) Farmers/Producers --> Wholesalers --> Retailers --> Consumers (APMC sale). Farmers sold 95.41 per cent of their produce in Channel II. Price spread analysis and Shepherd’s ratio revealed that Channel II is most efficient. The producers’ share in consumers’ price was highest with 70.84 per cent.

Export of Cumin from IndiaThe export of spices and spice products from the country touched an all-time high of 947790 tonnes valued at `17665 crore during 2016-17. Coriander, cumin, fennel, fenugreek and celery are the major seed spices exported from India. Cumin was the second most exported spice,

recording an increase of 22 per cent in volume and 28 per cent in value. A total volume of 119000 tonnes of cumin valued at `1963.20 crore was exported from India during 2016-17. The mandatory checks on cumin and its by-products implemented by the Spices Board of India in the back drop of rapid alerts from importing countries helped enhance exports. The export of cumin from India between 2003-04 to 2016-17 is given in Chart 2. It may be observed from the chart that barring 2005-06, 2010-11 and 2015-16, the export in both quantity and value terms is continuously increasing at the compound annual growth rate of 22.72 per cent and 30.74 per cent, respectively. Indian cumin seed has an edge over that of Syria and Turkey. Sowing in October-December and harvesting in February-April is helping in Indian cumin exports as other countries would have exhausted their produce by then. Further, demand for Indian cumin is high due to its flavour, quality and aroma as compared to Syrian and Turkish cumin.

Major Destination of Exports from IndiaThe major destination of export of cumin from India is presented in Table 3. Cumin seeds are exported to USA, Singapore, UAE, Bangladesh, Brazil; cumin seed powder exported to UK & USA; Cumin Oleoresins exported to USA, UK and UAE. Eleven countries, viz., Vietnam, USA, UAE, UK, Malaysia, Brazil, Egypt, Bangladesh, Suadi Arabia, Nepal, Sri Lanka account for

Table 3: Export of Cumin during 2011-12 to 2015-16(Qty. in tonnes & Value in ` lakh)

Country 2011-12 2012-13 2013-14 (P) 2014-15 (P) 2015-16 (Est)Qty Value Qty Value Qty Value Qty Value Qty Value

Vietnam 6662 9460 10934 15170 38648 51014 47823 53542 24689 37492USA 4387 7108 9560 14186 8117 12601 11225 14972 9776 17964UAE 6261 8277 8441 10833 11005 13053 18693 22400 5787 8551UK 2151 3433 3066 4430 3340 5429 3617 5485 3757 7324Malaysia 2132 3257 2902 4163 3528 4895 4022 4967 4078 6537Brazil 3766 5000 3859 5017 5093 6022 6685 7553 4656 6334Egypt(A.R.E) 1798 2318 5493 7077 6952 8485 9630 9951 4306 6063Bangladesh 1416 1728 2110 2627 2086 2446 2885 3066 4275 5428Saudi Arabia 963 1225 3224 4137 4658 5496 3731 3888 3249 4566Nepal 230 286 4332 5771 2303 2837 1936 2163 3006 4386Sri Lanka 383 505 1222 1640 1967 2372 2420 2762 2630 3888Others Countries 15351 21845 30459 40256 33803 45356 42833 53071 28491 48166Total 45500 64442 85602 115307 121500 160006 155500 183820 98700 156699Source: Spices Board of India

Source: Agmarknet.gov.in

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Publisher :- Dr. U. S. Saha, CGM, Department of Economic Analysis and Research (DEAR), NABARD, Head Office: Plot No. C-24, ‘G’ Block, Bandra-Kurla Complex, Bandra (E), Mumbai- 400051

Disclaimer: “Rural Pulse” is the publication of the Bank. The opinions expressed in the publication, are that of the Research Team and do not necessarily reflect those of the Bank or its subsidiaries. The contents can be reproduced with proper acknowledgement. The write-up is based on information & data procured from various sources and no responsibility is accepted for the accuracy of facts and figures. The Bank or the Research Team assumes no liability, if any, person or entity relies on views, opinions or facts & figures finding place in the document.

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69 per cent of cumin exports from India during 2015-16. Export to Vietnam accounted for 24 per cent followed by USA (11%), UAE (5%), UK (5%), Malaysia (4%) of total exports during 2015-16.

Major Constraints in Indian Spice IndustryThe Indian spice industry in general and cumin industry in particular is facing many challenges in spite of continuous export growth. If these challenges are not addressed in time, the cumin industry may have to face difficult times and the growth rate may not be sustainable. The following are the major constraints.a. Challenge of productivity: Increase productivity to

bring down the cost of production.b. Challenge of food safety and quality: The major

importing countries are coming out with more stringent legislations on quality requirements. Indian standards are also revised.

c. Challenge of technology: New product requirements imposing need to constantly innovate.

d. Challenge of tariff and non-tariff barriers. e. Challenge of new competitors.f. Challenge of equity: Internal challenge to double

the farmers’ income so that they continue to produce the raw material, inclusive growth.

g. Challenge of distribution and promotion.h. Challenge of product placement of Indian brands

abroad: Slotting fees, brand promotion, etc.

Though the requirement of quality is compulsory for exports, the food safety norms in India also call for strict vigil in terms of quality parameters for consignments traded in India. The Spices Board in association with the exporting fraternity is taking effective steps for strengthening supply chain and future growth in trade.

Spreading awareness regarding best practices like, good agricultural practices, good collection/harvesting practices, good post harvest and handling, good manufacturing practices, good hygienic practices, good marketing techniques, traceability are essential to maintain food safety and quality standards to boost exports. Campaign against improper use of pesticides resulting in residue problems, mechanization of farming, brings down the cost of cultivation. Market driven research programmes and collaborative efforts, cultivation in non traditional areas are some of the strategies to overcome the constraints.

ProspectsThe progress of Jeera sowing is more than the last year acreage. As on 27 November 2017, Gujarat farmers have planted Jeera in 1.91 lakh ha. which has increased by 35.6 per cent as compared to 1.41 lakh ha. last year on the same period. Higher prices throughout the year, strong export demand and good monsoon prompted farmers to cultivate more Jeera in India during 2017-18. Cumin ranks second amongst spices exported from India, next to chilli. Being the largest producer, consumer and exporter of cumin, India is the dominant player in the global market.

Policy ImplicationsIndia’s harvest enters the global market (March and April) before Syria, Turkey and Iran (July). Thus, the Indian crop holds a major advantage in the international markets. As the demand for organic seed spices is growing, there is a need to give awareness for organic production of spices seed in general and cumin seed in particular by giving scientific information on suitable production technology, integrated pest management and evolve specific varieties for organic production. The efficiency at production level needs to be raised in order to make the product price competitive. The cumin producers and exporters need to be educated and trained to maintain the quality standard of the products. Contract farming with buyback arrangement with exporters, as a tested model of operation, should be encouraged.

To sustain production of cumin in our country and to compete in international market, there is a need to improve its productivity by developing improved production technologies and suitable improved varieties which are resistant or tolerant to cumin blight. The instability of export earnings from the cumin seeds is mainly due to fluctuation in the production in other countries (Syria, Turkey and Iran) and political uncertainties in these countries and increased value of Indian spices in the world markets. Appropriate measures such as adoption of advanced processing technology to improve the quality of production of spices crop to boost the export, setting up of Spice Park for cumin, fennel, fenugreek and coriander in Unjha, which is Asia’s largest cumin market and globally renowned seed spices trading hub, improving the quality of processed spices to enhance the competitiveness of Indian cumin seeds in the international market, provision of subsidies at production and marketing stages like transportation, storage and processing will go a long way in making India competitive in cumin production and marketing.